July’s gross mortgage lending was £19.1bn, 7 per cent below the record figure of £20.5bn in June, though 19 per cent higher than the £16.0bn in July last year.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.7bn, compared with £5.6bn in June, an average of £5.3bn over recent months and £4.0bn in July 2005.
There were 178,438 mortgage approvals (for all purposes) in July, with an aggregate value of £18.4bn. This number of approvals was 2 per cent lower than in July 2005, though their value was 8 per cent higher. The average loan approved for house purchases was £139,200, 5 per cent higher than a year earlier.
Net lending on loans and overdrafts rose by £0.7bn in July, compared with an increase of £0.2bn in June and an average rise over the previous six months of +£0.4bn. In contrast, underlying net lending on credit cards fell by £0.3bn, repeating June’s fall and compares with an average monthly contraction of £0.1bn over the first half of the year.
David Dooks, BBA director of statistics, said: “July is typically a slow summer month for mortgage approvals, so the lower numbers and value of loans approved compared to June were anticipated. Allowing for this seasonality suggests that loans approved for house purchase and remortgaging remain on a constant trend, whilst demand for equity withdrawal has continued to weaken since the turn of the year. The drawdown of loans approved in previous months shows strong mortgage lending to have been approaching the peaks of 2004, ahead of the interest rate rise in early August. Meanwhile, unsecured lending is displaying quite a different trend, with the growth rate continuing to decline, largely reflecting the on-going contraction in credit card borrowing.”
Mortgage Lending
The July increase of £5,727mn in seasonally adjusted net lending leaves the annualised rate of growth unchanged at 13 per cent.
Compared to the same month a year earlier, July’s loan approvals for house purchase were 5 per cent higher by number and 10 per cent higher by value. Remortgaging approvals were 2 per cent lower by number though 7 per cent higher by value; and approvals for equity withdrawal were 10 per cent lower by number and 5 per cent lower by value.
